Sustaining Northeast Farms for Future Generations

Sustaining Northeast Farms for Future Generations

Summary

Sustaining Northeast Farms for Future Generations is a three-year collaborative project
that will educate 400 agriculture producers on farm succession planning issues and resource conservation policies so that future generations of farmers will operate profitably and protect our natural resources.

Of the anticipated 400 farmers receiving information on farm transfer planning, 150 will take two-three of the following action steps for farm transfer:

1) Contact organizations to learn more about farm succession and natural resource protection.

2) Talk with family members about the human and natural resource needs of the farm;

3) Identify, train and mentor a farm successor;

4) Develop a better understanding of farm transfer and natural resource protection options;

5) Inventory and evaluate human and natural resources of the farm;

6) Increase awareness of natural resource and farm transfer programs.

7) Understand loan options and the farm’s financial position;

8) Understand the tax implications for land use planning, estate planning, and farmland protection;

9) Schedule meetings with attorneys, accountant or farm transfer/resource protection staff; and

10) Transferlivestock/machinery/management/land to the next generation.

Objectives/Performance Targets

Of the 400 farmers receiving information on farm succession planning and land-use conservation policies, 150 will take at least two-three action steps to transition their farm to the next generation and/or protect their land resources within three years.

Accomplishments/Milestones

1. Farmer education needs identified through farm succession survey returns.

Early in 2006 we received the final analysis of the Farm Succession Survey that was conducted in Pennsylvania and New Jersey in 2005. Primary results for Pennsylvania include: 40% of farmers say they will not retire; 29% say they will semi-retire; and only 24% say they will retire. Inversely proportional is another statistic indicating difficulty: 32% have identified a farm successor and 64 % have not done so. Part of this problem is related to the need for better family communication strategies among family members: 64% have discussed their retirement plans with someone, and most often that is other family members, but 21% have discussed their retirement plans with no one, not even family. Complete results were forwarded in the report sent to SARE earlier this year.

2. Listening to 8-10 farmers outline their educational needs through focus groups

Focus groups were conducted in 2005 and results were reported then.

3. 300 farmers will attend educational workshops on farm start-up and farm succession.

To date, twelve farm transfer workshops had 522 farmers in attendance. Four beginning farmer workshops attracted 260 farmers.

Passing on the Farm workshops for 05-06;

In 2005-2006, 2567 invitations were mailed to farmers =and 276 press releases were sent to local and farm press. A total of 278 farmers attended seven farm transfer workshop representing 23,843+ acres.

A summary of the action steps in 05-06 include the following.
The presentation was important to me: 100%
Plan to discuss farm’s future with family: 94%
Better understanding of tax consequences 90%
Better understanding of options 99%
Understand loan programs 81%
Will meet with accountant, financial 80%
Will meet with an attorney 82%
Need help in discussing plans w/ family 49%
Plan to learn more about farm tansfers 96%

Types & ways we are reaching farmers:

First attendance at Farm Link event 89%
Plan to attend other Farm Link events 96%
Farm owners(most more than 10 years) 75%
Rent farm 5%
Thinking about gettting into farming 7%
Employed on farm 6%

Comments: Very Good meeting; Meeting was informative, lots to think over; It was everything and more than I expected; I feel the day was well spent.

From the most important thing I learned: Plan ahead and the importance of beginning early to plan (most frequent responses); the importance of dealing with family issues in setting up a succession plan for our farm, communication between spouses, communication; It is possible to pass on the farm in some way and we need to communicate with the children; I have a lot of reading material to study, good resources and contacts, many options and resources available, legal issues, everything; farmland preservation; practical issues; listen carefully; plan early; “attorney’s don’t have halos,” wills and estates; about PA Grows; keep better records and work on transferring early; farmer story was excellent; that I better get busy!

New & Beginning Farmer workshop – March 11, 2006 at Slippery Rock University and November 4, 2006 at Lancaster Farm and Home Center:

A beginning farmer workshop was held at Slippery Rock University in conjunction with the MacCoskey Center for Sustainable Agriculture on March 11, 2006 with 52 people in attendance. Another beginning farmer workshop was held at the Lancaster Farm and Home Center on November 4, 2006 for the eastern part of the state with 97 people in attendance.

Farmer speakers focused on the business of farming and strategies for new farm entry including taking over a family farm, starting from scratch and working into a partnership. Developing a business plan, agritainment marketing, cooperative marketing, and other value-added types of marketing rounded out the presentations.

The western keynote speaker, John Jamison, talked about converting land that was strip-mined to pasture and growing his lamb business from 30 lambs sold in 1985 to over 6000 sold annually this year. He processes and markets his lamb to chefs all over the United States. Eastern keynote speaker, Dr. George Conneman focused on “What you need to know to get started in farming.”

The resource time with service providers from FSA, Farm Credit, PA Grows, Crop Insurance, Conservation District, Extension, and NRCS was viewed favorably and provided individualized assistance to participants.

Beginning farmer surveys from Slippery Rock and Lancaster indicate the types of people we are reaching.
Thinking about getting into farming 59%
Working on farms 16%
Renting a farm 9%
Own a farm* 30 %
*Some own a farm and are thinking about farming.

From the most important thing they learned: The importance of a business plan and where to get resources; have a vision, create a plan; loan options; diversity of opportunities.

Action steps/outcomes

Today’s presentation was important to me 87%
Plan to investigate markets for my products 58%
Better understanding of ways to structure farm entry 58%
Better understanding of options 81%
Understand loan option for new farmers 35%
Plan to develop a business plan for my farm 67%
Plan to talk to other farmers about start-up 52%
Plan to lean more about farm entry 68%
Need help with family about farm entry 20%
Examples:
A). 1/6/2006 Wanted information on farms available in the database and ways to locate a farm. His father attended PA Farm Link’s business class. The son wants to do organic production of beef, chicken, and pork and direct market his products. He was given an application for the database and information on leasing as well as production strategies. He bought a farm in November of 2006.

B) 2/3/06 Lancaster County farmer want to transition to son within the next year. Sent
Information was given on how to find an attorney and exercises on family questions that need to be answered were provided, including information on equitable vs. equal treatment of children and transferring ownership of assets.

C). 5/2/06 York county beginner is interested in buying a 35-acre turkey farm. He
attended PA Farm Link’s business class and understands how to determine projected income based on expenses and expected revenue. He was counseled to find our as much financial information as possible and “run the numbers.” He followed through and was able to project that based on the asking price for the farm, he would come out $5000 in the red each year and subsequently did not make an offer on the farm.

D).7/17/06 Perry County farmer wanted information on how to transfer cattle. He was
provided with information on different methods of transferring ownership and ways to structure the farm business.

E). 12/6/06 Beginning to plan for farm transfer to son. The family received information on transferring ownership, treating children equitably, farmland protection programs, business transition planning and were encouraged to attend an upcoming farm transfer workshop.

5. Listening to 8-10 farmers how participated in workshops or received individualized attention respond to these services.

Part of this project was conducted in 05 and contained in the 05 annual report. Additional follow-up will be conducted in early 07.

6. Develop program materials, share evaluative materials with New Jersey Farm Link.

In response to farmer requests for information, the county conducted an inventory of natural resource protection and conservation organizations. From this inventory, print and electronic fact sheets were developed for each of the 67 counties in Pennsylvania. This information includes a description of the mission and focus of conservation district offices, Natural Resource and Conservation Service Offices, County/State Farmland Protection Programs, Private Conservation Programs and Conservancies, and RC&Ds. This inventory will be included as an appendix to the final report.

On the December 18th agenda, resource materials and evaluative materials were shared with New Jersey Farm Link, Rutgers, NJ Department of Labor, NOFA-NJ, the New Farmer Development Project and the NJ Department of Agriculture. Discussion of the needs of beginning and transferring farmers were discussed and how best to meet those needs. New Jersey has the highest per acre land values of any state in the Northeast making it very difficult for beginners and putting added pressure on landowners to sell for development. New Jersey plans to host a beginning farmer workshop in the future and is looking at ways to accomplish this in a way that will be most effective.

7. 75 farmers will implement two-three of the eleven action steps identified in the performance targets.

Examples of farmers who took action as a result of this project:

W9. Talked to her accountant as a result of the workshop to determine financial situation. They also talked to the Conservation District and NRCS about stream bank fencing.

C10. Spoke with an attorney as a result of the workshop. Also talked to Conservation District about filter strips.

8. Share knowledge gained in a Northeast conference.

Instead of holding one conference we are trying to incorporate our findings into other ongoing events connected to Northeast universities and colleges, lending institutions, local governments, state legislators, etc. To date we have shared our findings and the educational needs with the following groups.

The press releases outlining the findings of the survey and how that impacts agriculture were sent to most local publications in Pennsylvania. Posters displaying the key findings were made and are exhibited at all outreach activities and farm events. Farmer reactions to the statistics include agreement with the situation, indicating they can’t retire due to poor profitability, and problems with profitability and encouraging the next generation to even consider farming.

Representatives of PA Farm Link Board received a copy of the final report on the farm succession survey. Board members represent Penn State University, Delaware Valley College, Mid-Atlantic Farm Credit, PA Department of Agriculture, Farm Service Agency, PA House of Representatives, PA State Grange, PA Farm Bureau, PA Farmers Union, Wildlands Conservancy, American Agriculturalist, PA Young Farmers, and farmers received the report and the implications of the report were discussed.

Meeting with State Senators and Representatives: Outreach included publicizing the survey results in both the farm and local press. We engaged the current chair of the Pennsylvania House Agriculture Committee to host a special meeting to share these results with members of both the State Senate and the State House of Representatives. Primarily members of the Agriculture Committees attended. A presentation of the findings was made with discussion following on next steps that could be taken to address some of these concerns.

The committee will consider several recommendations that were presented:

· Encourage owners to rent to beginners by providing a state income tax incentive to do so.

· Encourage farm transition planning by assigning extra points in the farmland preservation selection process to those farmers who have a farm succession plan.

· Increase the funding to programs that raise awareness of and understanding how-to transition the farm.

Agricultural Law Forum. On December 8, 2006 PA Farm Link presented the results of the Farm Succession survey at the Agriculture Law Forum 2006 with 27 lawyers in attendance. Participants were very interested in the findings and interested in learning more about how they could help farmers in their transition planning. Several attorneys were added to our lawyer referral list and some will attend our upcoming workshops to learn more.

The retirement statistics (40% are never going to retire, etc.) generated some discussion on estate planning, farm profitability and what strategies to use to encourage more succession planning. The question was raised about the perception that attorneys were too expensive. Although this is a legitimate concern, frequently family issues and inertia act as even bigger roadblocks to successful farm transition. PA Farm Link recommends family meetings prior to meeting with the attorney to determine plans, goals and objectives for the farm transfer, so that “attorney time” is focused on time needed for legal matters and not family issues.

Impacts and Contributions/Outcomes

1. To date, 522 farmers learned about farm transfers in twelve farm transfer workshops and 260 farmers learned about farm start-up in. four beginning farmer workshops. They are taking action steps and these steps are being recorded for the final report.

2. Farmers are receiving information on what happens if they don’t plan in workshops on farm start-up and transfer. Both types of workshop evaluations confirm that start-up farmers are taking to heart the necessity of developing a business plan and that retiring farmers are taking to heart the message of early planning and good communication. Here is one farmer’s response: “It motivates you to not just think about it but to get out and do something. Different ideas than what I had, but what’s all involved in it, it isn’t just one thing you do, you have to plan ahead, it doesn’t just happen all at once, you have to work through it.”

3. Farmer suggestions for examples of case studies on farm entry and transfer were written. A more comprehensive publication outlining differing situations and how they were handled with accompanying resource material is planned for the future if funding can be secured.

4. To expand farmer access to farm entry/transfer knowledge, 12 columns were written in Lancaster Farming on these issues. Farmer response indicates that they are reading these columns and contacting us for more information on start-up and transfer.

5. Pennsylvania Farm Link’s Natural Resource guide was developed listing organizations that work with farmers on their natural resource needs. This can be use as a county-by- county handout or as a statewide guide.

6. State legislators and members of the PA Bar Association were informed of the results of the farm succession survey. Suggestions were made to the legislature to encourage farm transition by creating income tax and farmland preservation incentives.

7 A network of beginning farmers was started and we continue to encourage and provide educational assistance to these individuals. An annual event was held and a two-hour course in record keeping was offered at no cost to participants.

8. A checklist of farm transfer issues that need to be addressed is included in farm transfer workshop materials and provided individually to farmers.

9. Resource material, agendas, and evaluative materials were shared with New Jersey Farm Link.

Collaborators: